Lay v Official Assignee
[2021] NZHC 2224
•27 August 2021
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2011-409-1212
[2021] NZHC 2224
UNDER the Insolvency Act 2006 IN THE MATTER
of an application for discharge from bankruptcy
BETWEEN
ANDREW THOMAS LAY
Applicant
AND
THE OFFICIAL ASSIGNEE
First Respondent
AND
CONSUMER FINANCE LIMITED
Second Respondent
AND
J. A. RUSSELL LIMITED Third Respondent
AND
CROWN ASSET MANAGEMENT LIMITED
Fourth Respondent
AND
ANZ BANK LIMITED
Fifth Respondent
AND
INLAND REVENUE DEPARTMENT
Sixth Respondent
Hearing: 26 August 2021 Appearances:
K P Schmidt and Applicant by AVL No other appearances
Judgment:
27 August 2021
JUDGMENT OF ASSOCIATE JUDGE LESTER
LAY v THE OFFICIAL ASSIGNEE [2021] NZHC 2224 [27 August 2021]
Andrew Thomas Lay (Mr Lay) has applied for early discharge from bankruptcy under s 294 of the Insolvency Act 2006 (the Act).
The application was called in Court on Thursday 26 August 2021 and Mr Lay appeared by audio visual link (AVL) due to the then prevailing COVID 19 national lockdown. I confirm Mr Lay was available for examination as required under s 177 of the Act. However, given the material filed I had no further questions for Mr Lay.
There was no appearance by or on behalf of any creditor or the Official Assignee (whose attendance was excused). I will refer to the contents of the Official Assignee’s report below.
The circumstances of Mr Lay’s application are a little unusual. In Mr Lay’s affidavit he explains that in 2011 his electrical and automation business incurred debts it was unable to pay. Because of the Global Financial Crises and the Christchurch Earthquake Sequence there were several defaults by Mr Lay’s clients (he trading as a sole trader). As Mr Lay was unable to meet his business debts he was adjudicated bankrupt on 18 October 2011.
Mr Lay’s sworn evidence is that in late October 2011 he completed a Statement of Affairs and handed this into the Christchurch Insolvency and Trustee Service. Mr Lay says he did not hear further from the Official Assignee and he went on to obtain paid employment.
In November 2019, Mr Lay contacted the Official Assignee about being discharged from bankruptcy. He was informed the Official Assignee did not have a Statement of Affairs on file, meaning the three-year term of Mr Lay’s bankruptcy had not commenced.
The advice from the Official Assignee’s Office was that Mr Lay would have to complete a Statement of Affairs and only when that was received would the three year term of his bankruptcy commence, notwithstanding Mr Lay being adjudicated bankrupt in October 2011. The Official Assignee drew Mr Lay’s attention to his ability to apply for early discharge under s 294 of the Act, but noted he would still need to submit a completed Statement of Affairs which Mr Lay subsequently attended to.
Since 2011 Mr Lay has not operated a business but has rather worked as an employee. In his application he says that he has in effect been bankrupt for nine years and throughout that time he has complied with the obligations on a bankrupt.
The Official Assignee’s Report
The Official Assignee’s Report notes that creditors’ claims totalling only $7,208 were received. There were further potential creditors who did not file claims, totalling not quite
$40,000.
The Official Assignee notes it wrote to Mr Lay three times in late 2011 concerning his Statement of Affairs. Mr Lay, in a reply affidavit, says he did not receive those letters as at that time he was living in his car.
The Official Assignee says: “the applicant has co-operated with the Assignee and there is nothing untoward to report with regard to his current conduct”.
The Official Assignee has no objection to the applicant’s discharge and will abide the Court’s decision.
I note that Mr Lay’s counsel has complied with the requirements of r 24.37 of the High Court Rules 2016 to advertise the application and to serve all creditors. Again, no creditor has taken any steps.
I have no reason not to accept Mr Lay’s sworn evidence that he delivered a Statement of Affairs to the Assignee’s office in late 2011 which seems to have gone astray through some administrative error. But for that administrative hiccup, Mr Lay would have been discharged automatically in late 2014.
I note the Official Assignee does not seek the imposition of any conditions in relation to the early discharge.
Given the lack of objection from any party, the substantial passage of time from Mr Lay’s original bankruptcy and his evidence that he did file a Statement of Affairs, I am
satisfied that in these circumstances it is appropriate to make an order under s 298 of the Insolvency Act 2006 immediately discharging Mr Lay from bankruptcy, and I so order.
Associate Judge Lester
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